Every financial investor on their path to the financial market must undertake a substantial amount of preparation. Here it is clearly legal aspects of trading with financial tools, and the technical problems connected with forecasting and evaluating market indicators. Today, we’re considering the not so insignificant question of “Verification”, which you are required to pass on brokers’ trading platforms. We suggest going through all the legal and technical nuances of brokers’ requirements, defined by the necessity of undergoing verification, and also the collection of essential documents that market operators have the right to demand.

So, not so long ago, to gain access to the financial market, all you had to do was open a trading account with any one of the many platforms for trading. However, now the trading sphere is has become more official and all participants must meet set guidelines. For this reason, the vast majority of large, systematized brokers require clients to pass the verification process or, more simply, identification process. Moreover, it is worth noting that there is no difference between working on a Forex platform or with a binary options broker, even the more novel services, such as cryptocurrency exchange, require their partners to undergo verification. Considering the verification process, first and foremost, it’s worth going through how it is regulated, why it’s necessary and what it amounts to specifically.

Verification – Who needs it?

If you have read the reviews and relevant articles written by traders on the topic of verification on operators’ platforms, then you would have noticed some market participants view this technical operation negatively. The reason for this lie in the level of trust between brokers and investors. The issue is that, when getting started trading privately online, many operators use verification as another tool to deceive partners. Many people remember the unjustified refusal to disperse funds. In which, brokers often pose numerous complex and difficult demands when verifying traders’ personal identification. However, brokers themselves were the ones who set the stage for this mistrust of the legal process! And yet, why do you need verification?

Usually, financial brokers, who require client verification, justify it with several facts, the position of the well-known investing organization FAFT, market regulators’ requirements, and also interest in protecting traders and their investments. The brokers’ requirements would be reasonable and legally justified if weren’t for the many “but”s!

Let’s start with investment and partner protection. Of course, experienced investors and reasoned traders are well aware that brokers are primarily focused on their own wellbeing, with clients’ interests coming in around third. The issue is that the system of the financial market is set up in such a way, that if the trading service carries out illegal operations, first and foremost, it will be the operators themselves who will be punished. It makes sense, why search for a single con artist, if you can punish the platform, which created the opportunity for such activity for technical and legal reasons. Therefore, by requiring verification, brokers are protecting themselves. Besides that, this situation raises skepticism anyways due to the requirement to disclose personal information and documentation. This in and of itself decreases clients’ security. But don’t be scared off, these days financial trading platforms protect partners’ information with some of the highest security measures.

The second point is the FATF requirement. TAs a start, what does this organization do? It’s all quite simple: FAFT is an intergovernmental organization, handling the international issue of money laundering. The organization doesn’t take any physical measures against it. Instead, it analyzes and develops specialized financial schemes, which aim to prevent laundering money procured through illegal means, excluding tax evasion. However, this organization’s recommendations and guidelines are only binding if the government ratifies intergovernmental agreements.

The European Union ratified their legal relationship with FATF in 2005, Russia, in turn, adopted the standards of this organization in 2001. Fighting money laundering isn’t the only reason for actively taking on FATF’s recommendations, they also seriously limit the ability of terrorist organizations to move money. As you know that is a very serious problem. However, when considering FATF’s activity and recommendations through the lens of a private investor on the financial market, it is worth noting that the recommendations and guidelines are only applicable if the trading platform is registered in a country where the operator also works. To put it into other words, if your broker falls under the jurisdiction of a country that hasn’t ratified FATF, then the verification process isn’t required to meet the organization’s standards and is in certain situations illegal.

Having conducted a brief initial survey, it’s of note that the majority of financial market operators today are located within European jurisdiction, therefore the companies don’t have the freedom to ignore the FATF requirements in regards to the client verification process.

Continuing along the lines of the legal justification for requiring verification, it is worth stating that in financial legal relations and accounting with brokers and traders, there is yet another side, the payment or banking service! Partially, these organizations are regulated by entirely different, stricter principles and rules, therefore, without identity verification, you simply cannot work with financial tools.

In sum, there is a reasonably wide selection of organizations, which force brokers to require their partners to undergo a verification process. These rules are legal and shouldn’t be fought or questioned.

What documentation do you need for verification?

Verification is first and foremost the process of identifying the client and directly linking the investor concretely to their trading account. That is why the main document requested to verify an individual’s identity is their passport. However, this is where trader from Russia can run into some specific problems. If you work with a Russian broker, then all you must do is present your Russian passport, with a scanned copy of the registration page with the stamp. However, most traders prefer working on European operators’ financial platforms, and here there will be some difficulties. The issue is that outside Russia there is no internal residence permits or system of registration in specific areas. The second point also being that they do not accept documents written in Cyrillic. Therefore, to pass verification in foreign countries you need a foreign passport, and, of course, an obnoxious corroborating document, which irritates traders more without exception, such as a service payment receipt addressed to your official residence! The operator also requires notarized copies of all documents! With the number of documents required you could open a foreign bank account!

At first glance, the list of documents and standard requirements appears simple, however, in the practical reality, traders don’t always possess receipts addressed to their residence, severely complicating the verification process. For this reason, financial market system operators always provide specific alternatives for verifying partners.

Verification – What you need to know?

As annoying as the process of verification on brokers’ platforms can be, the process is a very effective tool for protecting traders’ investments. However, many operators to this day use this process as a means to delay settlements with partners. In order to not fall into a difficult situation and have the opportunity to work with a professional and secure broker, it is vital to pay attention to the following requirements and facts of collaboration:

• Already at the account registration stage, secure brokers request various information for the later verification process. It is already necessary to present an exhausting range of required documents.

• Don’t work with companies which require documentation in-line with the EU guidelines, yet aren’t located within the European Union and aren’t partnered with the financial instruments of an EU member country.

• Con artists will categorically refuse to propose alternative documents to you, as a Russian citizen, for verifying your identity.

• Avoid operators who insist on using simple local payment services with clients for financial dealings, over global services with complex client verification processes.

• Reject brokers who request a large amount of documentation, while requiring you to provide both Russian and English copies

Use this list of recommendations, you can protect yourself from problems with accounting. Don’t give them the opportunity to try to con you.

In order to best protect your information against fraudulent brokers, use the following list of practical recommendations:

• Before finalizing your trading account in full measure, on the operator’s platform, study the requirements and technical process of verification. You should have a clear understanding and have a summary of information on this question. Your first step should be familiarizing yourself with the list of required documentation for verifying your identity, assess your broker’s ability to change their rules once you’ve already begun the partnership process.

• Conduct an analysis of your broker’s status. Often companies propose very difficult verification processes, justifying it based on their partnerships with very reputable banks or work in the national legal fields, which are also often established financial centers. If the publicly available information isn’t enough for you to properly evaluate, go to the operator for further information. If the broker runs a legal platform, then they will be more than happy to provide any information you may be interested in.

• Also before beginning trading, determine what method of payment are available, which will aid you in any future accounting. Saving yourself from having to verify your identity twice, many payment services have similar requirements for verifying the identity of their clients.

• You can only start placing trades after you have completed the entirety of the verification process!

In closing, putting aside traders’ negative views on verification, it is worth saying that today it does not only protect investments and work in the legal field but is also a clear and distinguishing sign of any professional and secure platform. Therefore, completing verification on your broker’s platform enables you to make the right choice in relation to the quality of trading service and to carry on comfortably trading with financial tools at your disposal.

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